Recap of Saturday, June 5

DISCLAIMER: THE FOLLOWING "Cost of Freedom Recap" CONTAINS STRONG OPINIONS WHICH ARE NOT A REFLECTION OF THE OPINIONS OF FOX NEWS AND SHOULD NOT BE RELIED UPON AS INVESTMENT ADVICE WHEN MAKING PERSONAL INVESTMENT DECISIONS. IT IS FOX NEWS' POLICY THAT CONTRIBUTORS DISCLOSE POSITIONS THEY HOLD IN STOCKS THEY DISCUSS, THOUGH POSITIONS MAY CHANGE. READERS OF "Cost of Freedom Recap" MUST TAKE RESPONSIBILITY FOR THEIR OWN INVESTMENT DECISIONS.

Who Has It Right About the Direction of Our Economy: The White House or Wall Street?

Eric Bolling, Fox Business Network: 411,000 of these jobs came from the Census. That brings the total number of Census hires up to 564,000. That outpaces oil and gas sector jobs at about 166,000. Railways at about 215,000. And even outpaces residential construction jobs. There are more people knocking on doors than there are building them and putting them up. Not to mention, the House Ways and Means Committee said up to 96 percent of these Census jobs are going to disappear in the short term. This was a dismal jobs report.

Julian Epstein, Democratic strategist: On balance, this is a good report. You don't look at jobs numbers in a vacuum. You have to look at overall trends. A year ago, we were losing 700,000-plus jobs. Now we're gaining 400,000-plus jobs even if a lot of those were in the public sector. A gain of 400,000 per month is close to what Bush was doing in his best years. Before the stimulus went into effect, our GDP was a negative 6 percent per quarter. Now, it's positive 4 percent growth. Overall, we're seeing economic numbers that are very, very good. Had we not had a stimulus, we'd probably still be losing a million jobs per month.

Gary B. Smith: There's evidence a lot of these Census jobs were actually double counted. Uncle Sam has got some fuzzy math going on here. We can assume a lot of these Census jobs are inflated. Sure, we can look at the economic trends. But I like to go back to the Obama administration's initial push for the stimulus. They said unless we do stimulus, unemployment will rise about 9 percent. Now, we've been at almost 10 percent for months with stimulus. So I don't think this jobs report has a whole lot to be proud of in it.

Pat Dorsey, Morningstar.com: There may or may not be over-counting involved with these Census jobs. But I'm really not that worried about it. These jobs are going away anyway in the short term, so overall they don't matter all that much. What we should be looking at are the two measures of unemployment. There's a corporate survey and a household survey. The household survey is showing more positive trends. But frankly, no administration can actually control the economy as much as they'd like to, or say they can. The business cycle has to run its course, and that often takes more time than people like.

Tobin Smith, NBT Media: When the economy is turning, what you want to look at is the household employment survey. The government calls and asks if people are employed, or looking for work, starting a small business, etc. And the household survey does look positive. But the bigger picture is over the next three to six months, and the stimulus runs out. The private sector isn't going to be hiring, and that leads to poor economic prospects.

Growing Calls for U.S. Government to Take Over BP's Oil Cleanup Operations

Tobin Smith: It's time for the federal government to take over BP's Gulf operations. This is the equivalent of a nuclear disaster, and we wouldn't want the private company who caused the thing trying to fix it. The federal government has the ability to mobilize tens of thousands of people to do what needs to be done to fix and clean up this disaster. The problem is we could have made this decision 15 to 20 days ago. The federal government will spend every dime they have to fix this thing, which is something I don't think BP will do.

Gary B. Smith: I'm no fan of what anyone has done here. The government really showed its true medal with Katrina at all levels—and they completely blew it. The two disasters are not apples to apples, but if the government had the technology and wherewithal to solve this problem, they would have already taken over. But the Coast Guard admiral heading the operation even admitted we can't replace BP. The government just doesn't have the ability. And frankly, BP has far more to lose not solving the disaster than the government does. Unfortunately, BP is the best shot we have.

Julian Epstein: I don't think anybody believes BP has done a good job responding to this disaster. And unfortunately, I think President Obama has been disserved by his staff. It took the White House far too long to get engaged, and they should have assembled the military, the Coast Guard, and the proper experts much sooner. All the resources of the federal, state, and local governments have not been properly tapped in to. This is an international disaster. And frankly, it's hard for me to be supportive of the administration on this issue.

Eric Bolling: Forget BP and the government. BP should open its checkbook, and give it to Louisiana Governor Bobby Jindal. He can fix this problem, and he's shown that he's the only one who really has a clue. The federal government should see Governor Jindal has boots on the ground, knows what he's doing, and can get the right wheels in motion to try and prevent the effects of the oil hitting land as much as possible.

Pat Dorsey: What we should look at is that prior to this bill, oil companies had incentive to cut corners, and possibly cut costs in terms of safety. So now, what incentive does BP have not to clean this up as quickly as it possibly can? Why on earth would they want this to go on longer? BP has considerably more incentive to fix this disaster right now than the government does.

Group of Investors Urge Walmart to Stop Supporting Government Health Care

Eric Bolling: When Walmart signed that letter and sent it to the Obama administration saying they support health care, I was scratching my head. I knew then this was going to come around and bite them in the butt. Sure enough, a year later, this is biting them in the butt. This health care reform is going to be a huge new expense for the company. And that will be passed onto consumers.

Julian Epstein: Actually, I think the senior executives and board of companies have a better idea of what's good for their respective companies than shareholders or political pundits on TV. Their point of view is consistent with many businesses. Many businesses will save $3,000 on the average employee due to health care reforms. As a whole, health care reform is going to be good for business, and the executives at Walmart understand that.

Tobin Smith: I don't think Walmart prices are really going to be affected by this. But Walmart wants to become a major pharmaceutical and health care provider. Their support for health care reform legislation is a business decision. This is part of their strategy to tap into a new $100 or $200 billion dollar sub-market in the health care industry. And it's a brilliant move.

Pat Dorsey: In this case, the executives may know more than the shareholders. Walmart is focused on making money. They're not a charity. When Walmart went off the low-price message a few years ago and tried to compete with Target and the like, they got bit in the butt. Walmart sees this health care move as a major way to tap into a new, profitable market, and that's what is driving their decision.

Gary B. Smith: In addition to expanding its pharmaceutical business, Walmart also knows health care reform is generally going to be crushing to the marketplace as employer mandates get implemented. But they also know they'll be able to take that hit better than just about any other business. As a result, Walmart can expand its market share because its competitors are going to get devastated by these reforms. It's a great business decision.

This week Charles Payne was in for Neil Cavuto. Charles was joined by Dagen McDowell, Adam Lashinsky, Gary Kaltbaum and Gerri Willis.

Nearly 1 out of 5 Workers Collecting Government Paychecks

Dagen McDowell, Fox Business Network: The problem is not the number of workers. Though we should note we do have more unionized government workers now than in the private sector. The problem is the pay. The pay and benefits for a government worker is a $1.45 compared to a dollar for everyone in the private sector. So, there's a 45 percent premium there. You should get paid a discount because they never fire you, you can't lose the job. You should be getting less in pay and benefits, not more than productive private sector workers. Right now, if you had government workers and were to cut the pay and make it equal with the benefits and the pay with private sector workers, it would save about $340 billion. That's enough to fill the budget holes in every state over the next two years.

Adam Lashinsky, editor-at-large, Fortune Magazine: The reason there's more unionized federal employees or government employees is simply because union membership has come down in the private sector so much and it hasn't in the government. The reason we have big deficits is not necessarily because government is employing unionized workers, it's more because government spending as a whole is out of control. The good news is that state and local governments can't print money. They can borrow money, but at a certain point they can't borrow anymore, that's why you're seeing the things you're seeing in the cities and the states. They have no choice, but to deal with the problems.

Gary Kaltbaum, Kaltbaum & Associates: When you're broke you're out of options? I think that there are plenty of options, too many jobs, too many high paying jobs, the pensions are out of hand, and the retirement plans are out of hand. The health care plans are out of hand and there has been absolutely no accountability throughout the years. It's time that the government treats itself like a business. When not enough is coming in, you've got to cut. When it pays more for somebody to retire and sit on a beach in Fiji instead of working, it is a big problem. I'm thinking of the movie, "The Blob", going from city to city, bigger and bigger and nobody is able to stop it. The only good news I'm seeing this year, finally people around the country are going to make the government accountable.

Gerri Willis, Fox Business Network: Let's drill down on some of these numbers. Take a look at public workers in Yonkers, NY for example. When they retire, their union members, city workers, police, firemen, etc. benefits are so high, we can't afford to pay all of these pensions. Also, they are getting more money than when they actually worked for the government as retirees. We can't afford this. You need to look across the country over to Oakland, California. They have a $42 million deficit there. Why? It is because they can't afford the pensions. It's not just the hourly pay that's a problem, it's the benefits, and it's the pension. We can't afford it. There's a finite amount of resources in the economy.

Calls for a Gulf Tax on Drivers to Pay for Oil Spill Cleanup

Adam Lashinsky: We should put a Gulf tax on drivers at the pump. I'm not saying that we should enact this on Monday morning by any stretch of the imagination. Extraordinary times do call for extraordinary measures. We have a non-emergency precedent for this in this country. Gas taxes helped build our interstate highway system. We recognize there's a direct relationship between driving and the oil in the Gulf. You know that BP and its insurance policy are going to foot the majority of this. But there may, sadly, come a point where their resources are tapped. I want to raise gas taxes. Whether or not we have a tragedy like this in the gulf we should raise gas taxes. We have relatively cheap gas in this country, 14 percent of your dollar in gasoline funds is too low.

Gary Kaltbaum: Why is it that every extraordinary measure equals the word "tax"? BP is guilty, whoever else is guilty, let them pay for it, leave Americans alone. The word "temporary" keeps being thrown out. However, I don't think that the word "temporary" is even in the government handbook. There's no such animal. Everything is always permanent. For the last 15 or 16 months it's been a "tax-arama" on a weekly basis, there have been proposals every week, trial balloons of bad tax, stock transaction tax. Every answer to every problem is tax Americans and I've got news for you, Americans are running out of money. This has got to stop and let these companies who are guilty pay for it, and leave me alone.

Dagen McDowell: With this, the operative word is not tax, it would be bailout. It is the moral hazard in stepping in and having the taxpayers bail out a company that, by the way, earned $16 billion last year, it has almost $7 billion in cash on its balance sheet, and it can pay. So, let it. It's BP's mistake. The point is that if people are upset by the spill in the Gulf and they want to do something about it, let it be up to the people to decide whether they want to drive less, rather than taxes. If you're upset about the lengths we have to go to get oil, then let the people decide for themselves rather than the government deciding.

Gerri Willis: Consumers are already seeing all kinds of income taxes. Our income taxes are going up the end of the year, right? We are also going to see other taxes for health care and then to add on a gas tax? Already when we go to the gas pump we're paying 47 cents out on every gallon in taxes. We are already paying gas taxes. You might say that 14 percent of your dollar in gasoline funds is not a lot, but the people out there, they need that gas to get to work. This is something they have to have, it is a necessity.

New Push to Tax TVs/iPads to Pay for Government "Media Fund"

Dagen McDowell: This makes no sense. The idea of taxing the very devices, the iPad, laptops, etc. that could save journalism. Those are the ways that people are going to get on the internet and access journalism. The iPad could be, just on its own, the future of journalism and actually able to charge for valuable content.

Gerri Willis: It's all about raising money and getting into our wallets, getting into our pocket books and for what? So that they can lay a tax on something that is actually making money out there because conventional media is not. The real problem here is that we're taxing people out of the middle class. Who is buying the iPad? Who is buying the Blackberry? Who is getting the iPhone? It's people in the middle class and you're taxing them out of the middle class. They can't afford this anymore and taxes are going up across the board.

Gary Kaltbaum: It seems like the government will take anything to take more money out of Americans' wallets, even in the rough economic times that we are facing. All they're doing if they come up with this is raising the cost of goods, which will take more money from people and the economy.

Adam Lashinsky: "They" in this instance is not the lawmakers; it's the Federal Communications Commission, and its staff. This is a trial balloon since they've recognized there's a crisis in journalism. Having said that, we don't have a tradition in this country of the government supporting journalism. What is going to happen is nonprofits are going to support serious journalism which doesn't hold the business model that it used to have. The idea behind it is the realization that journalism is good for democracy, that there's a crisis in journalism.

Would Nuking the Gulf Oil Leak be the Fastest and Cheapest Way to Kill the Spill?

David Asman: Is this the solution the BP oil leak? That's right, nuke it. Some scientists do advocate this. The Soviets apparently succeeded in doing it. Here is the video they say actually shows it, and now some at Forbes agree, nuke it. Hi everybody, I'm David Asman. Welcome to Forbes on Fox. Here today we have Mr. Steve Forbes, who as you can see had to wrestle Mr. Quentin Hardy for that seat in San Francisco, Rich Karlgaard, Elizabeth MacDonald, Neil Weinberg, and Stephane Fitch. Rich, I have to say, I'm a skeptic here, but nuke it?

Rich Karlgaard: This is the kind of option that you really have to put on the table. The leak has been going for almost 7 weeks. 500,000 gallons of oil a day are leaking. Tar balls are showing up on the coast of Florida. The only sure-fire option to stop this is a relief well, which is ten weeks away. That puts you into August hurricane season, so we might as well look at something that puts you in an 80 percent success rate, according to the Russians.

Stephane Fitch: I have enormous respect for Rich's knowledge about tech issues, but he's been watching too much "24." Set aside the fact that we promised not to explode nuclear weapons, set aside the fact that you're risking enormous amounts of sea life damage here, and you're left with this—it's insane!

Neil Weinberg: Obviously the conventional ways of solving this have not worked, so why not try some unconventional ones? I admit I'm a little nervous about this but we shouldn't have a nuke-aphobia here. We have nuclear power plants in our backyard. We have nuclear submarines. Just because something is nuclear, if it's detonated well below the sea, it doesn't mean that it's going to contaminate anything.

Steve Forbes: I can see the Gulf's future tourist posters. In addition to oil you can have warm water and radioactive water. The Soviet's can get away with playing nuclear Russian roulette with things like natural gas and the like, but this is in the ocean and it's never been done before. I don't think it's really been modeled before. So politically, this idea is a bomb and radioactive. It's not going to happen.

Elizabeth MacDonald: I think this is a very bad idea. We didn't know that this leak could happen with the technology that BP had there. Why do we think that a nuclear bomb would make it any better? It could damage sea beds for fishers, create an underground earthquake, and a title wave. We have to watch out for these things.

In Focus: Are New Reports From Canada and the CBO Proof That the Health Care Law Will Hurt Our Economy?

David Asman: President Obama is saying again this week that the health care law is the foundation to a stronger economy. But the CBO director is spelling out how the law won't cut costs or deficits as once promised, and Canada is warning about how its ballooning health care system is now consuming 40 percent of local government budgets. So Steve, is this the foundation to a stronger economy?

Steve Forbes: If it's a foundation, the house is already collapsing. No country has been able to find a way to make health care cheaper in a truly productive way. They do it with price controls and by practicing triage among older people. If you have certain things, they won't give you the treatment. So in terms of productivity and innovation, this is a disaster. In terms of helping the economy, this is a disaster for small businesses.

Stephane Fitch: Health care is a very expensive and serious thing. The difference between Canada and the United States is that Canada can see and measure its problems because it channels most of the spending through the government, whereas ours is private and largely out of control. That's why we spend 40 percent to 50 percent more than most developed countries that we consider our colleagues in the world economy. I think the president is right. Getting more health care to the people who we don't cover now, even if we don't save any money—and that's a serious problem, the bill is flawed in many ways—will make them more productive and will be good for the economy.

Elizabeth MacDonald: This is one big faith-based initiative. Look at Greece. It's in the red and it's being told by the IMF: if you want our bailout money, you have to reform the single-payer system that you've have since 1983. France has been in the red. Great Britain has been in the red. The idea that the government can do it better is nonsense. If that were right, we would not be $13 trillion in the hole. Housing is the most regulated market there is, and look where Fannie Mae and Freddie Mac got us.

Neil Weinberg: I think to say that Canada and its socialist medicine is all bad because costs are going up overlooks one little thing: they are getting older, just like we are! That's the primary reason costs are going up. I'm not saying that a public system is the way to go, but to blame Canada's rising costs on socialist medicine is nonsense. It's the fact that their population is getting older, just like ours is and Japan's and Europe's.

Mike Ozanian: If you want to look at better care with lower costs, look at Lasik surgery, where the government isn't involved. There you have better care with lower costs. One of the provisions that has come out recently is that, if you are an employee and you have to pay a premium that exceeds 9.5 percent of your household income, the employer could be subject to up to a $3,000 penalty. That's going to kill the restaurant and retail industry.

Flipside: New Bill Requiring Black Box Recording Devices in All Cars Will Help Trial Lawyers More Than Drivers

David Asman: First it was Toyota and now the Feds are investigating sticky gas pedals in Ford Fusions and Mercury Milans. What's Congress's solution? Force automakers to put little black box recording devices in all new cars. They say it's to help keep drivers safe but Rich, you say it'll help keep trial lawyers filing more lawsuits, right?

Rich Karlgaard: Sure it will. Half of traffic fatalities are caused by either drunk drivers or the chemically-impaired. These unintended accelerations are mostly caused by shoes and floor mats getting stuck on top of the accelerator. But the problem is, most of the drunks and the chemically-impaired don't have the deep pockets that trial lawyers like. Black boxes will give them just a sliver of a shadow of a doubt to be able to go after the automakers.

Victoria Barret: This is going to give us information. Trial lawyers now are like screenplay writers. They get to craft these elaborate stories and tell them to a judge or a jury. Now we'll actually have information from a black box that will tell us what happened in the last 30 seconds or minute of the accident. That's valuable. I don't think this should be mandated by Congress though. I think automakers should drive the cost of these boxes down and then install them to cover their butts.

Steve Forbes: The $5,000 cost of these will be great for Detroit. ((sarcasm)) It will force people to buy smaller, cheaper cars, which will lead to more carnage on the highway. Half of the accidents are single cars hitting telephone polls and the like. Those vehicles are flimsy, and we'll have more people injured or killed.

Mike Ozanian: I don't like Congress being in charge of this. It will come out as disastrous as health care reform or financial reform. But voluntarily, the automakers have been using black boxes since the 1990s. It's helped them win product liability lawsuits and in the designing of cars. I don't mind the black boxes, but I don't want Congress involved at all.

Neil Weinberg: I think the problem here is that Congress doesn't have enough to do. ((laughs)) You have 535 people there trying to come up with legislation. This is crazy! The cost-benefit—$5,000 a car—is completely insane. If they want to spend that money they should put it on the couriers on bicycles in New York City who are real menaces to us.

Informer: Investment Roadmap

David Asman: It's not easy being an investor these days. Here's a roadmap for stock to help you navigate the months and years ahead:

Calls to Boycott BP Growing Over Gulf Oil Spill: Should We Be Careful Though, If BP Goes Out of Business Will Taxpayers Be Left Paying for the Cleanup?

Cheryl Casone: BP bashing is spreading as fast as the Gulf oil spill, new calls this weekend for a boycott as the White House pursues its criminal investigation. But, be careful what you wish for. Guess who is going to pay the price if we bash and boycott BP right out of business. Hi everybody, I'm Cheryl Casone. Welcome to Cashin' In. Our Cashin' In crew this week is Wayne Rogers, Jonathan Hoenig, Jonas Max Ferris and Tracy Byrnes and Christian Dorsey with us as well. Welcome to everybody. Tracy, I'm going to start with you because you say that taxpayers might want to pull back on the bashing a little bit. Why do you say that?

Tracy Byrnes; Fox Business Network: Not because they should be excused by any stretch. It's awful and it's a crisis that will go down in history, but we keep bashing them and they are going to go bankrupt. Who is going to pay the tab? We are at the end of the day. We have to be very careful. They've already spent a billion dollars. They're creating this separate entity right now to potentially shelter all this. We have to be careful, BP is on a thin string right now. If we keep bashing them and sending lawsuits then they'll have nothing left to fix it. We're going to have to foot the bill.

Wayne Rogers; Wayne Rogers & Company: Well, I'm in Pensacola as we speak and of course all of the networks are here and the trucks are all lined up. Everybody's covering it. Yes, we've got oil here on the beach in Pensacola. It's going to start moving down tomorrow, ultimately to Destin and the other beaches down there and probably ruin it. But, that's not the point. To say that BP is going to go broke is ridiculous. They made in the first quarter this year $5.5 billion. They were up 135 percent over the first quarter last year. They had net cash flow in the first quarter of $7.7 billion. A billion is a thousand million. There's no way that company is going to go broke. They could buy all of the coast of Florida.

Jonathan Hoenig; Capitalistpig.com: Minimum, they've already paid out a billion as Tracy pointed out. What's to bash at the end of the day? They've taken responsibility. Everyone wants to hold them accountable. They've said from day one they are going to be held accountable. They are going to be in litigation for years and years to come and I think the stock is really reflective of that. Wayne, I love your confidence. You sound like a BP share holder, but the credit default stock market is starting to price in the fact that the company might not survive at least as a standalone entity. The bashing specifically from Washington of BP and big oil in general doesn't help anyone. It doesn't inspire confidence that the government's actually going to allow these companies to survive.

Christian Dorsey; Economic Policy Institute: Not really. Let's remember the only real reason they're in this mess is because their responsible for the worst oil spill in our country's history. The bashing is not just coming from Washington. Talk to Louisiana Republican Governor Bobby Jindal and ask him what he thinks of BP. Wayne's right, BP made $6.5 billion in profit in the first quarter. Last year was a bad year for them and they made $16.5 billion in profit. They have a long way to go before they could possibly be considered to be in trouble.

Jonas Max Ferris; Maxfunds.com: We're talking about their profits if they operate. There are politicians who want to take over the company and they've already said that. They want to put it in receivership. The greatest thing that has happened in this whole tragedy is the person who caused this is one of the wealthiest corporations in America. There are oil exploration companies that would already be bankrupt if they did this. We're lucky that this company has about $34 billion a year they can put towards this because that's the pretax before the tax money they bring in. They pay out dividends of $10 billion a year. We're lucky that we can milk that because who knows where this is going to go. There could be $100 billion in lawsuits.

Should We Scrap Minimum Wage to Create and Keep Jobs in America?

Cheryl Casone: A lot of concern on Wall Street and Main Street right now and it's all about a lot fewer private sector jobs being created than expected last month. Jonathan, you say that if we really want to add more jobs, get rid of minimum wage. Pretty controversial, Jonathan.

Jonathan Hoenig: Wages aren't arbitrary. If you want to make everyone rich why don't we just set the minimum wage for dishwasher at $100,000 a year? The minimum wage specifically destroys jobs. It raises costs to employers to unsustainable, uneconomic levels. A recent example of this is America Samoa, you have low skilled people who pack fish and tuna. They raise the minimum wage from $3.15 to $5.15 and now they've got 30 percent unemployment. Unfortunately, we'd rather see people not working at $5.15 an hour than working at $3.45.

Christian Dorsey: But it's kind of wrong. Every study by reputable economists, even ones that don't agree with me, politically show that there's no negative employment effects from the minimum wage. Jonathan, I can't believe that you would suggest that lowering the minimum wage, taking people further into poverty so that the rest of us taxpayers have to pay more money in income supports during the worst labor market since the Great Depression. That's a good policy. Put more people into poverty, that's going to help us out.

Tracy Byrnes: I don't think that's what he's saying. He's saying get rid of it unless the markets establish a rate for these people. Look, you need a job? Everybody needs a job, but the market will establish what I'm willing to work for. You will come up with your own minimum wage in and of itself just by letting capitalism do its job.

Wayne Rogers: Well the question is, is that your desire to create more jobs? Or is it to create productivity? Increasing jobs does not necessarily mean you are increasing productivity, which is what drives GDP. It doesn't have anything to do with whether the wage is minimum or maximum or whatever the hell the wage is. It's immaterial. It's are you creating productivity. If one guy can out work five guys then that's going to create productivity. So it doesn't matter. Otherwise it's a zero sum game.

Jonas Max Ferries: I took economics underground. I'm not going to deny that if you lower wages to a dollar in America there's some jobs that went abroad that are going to come back, dollar paying jobs that they are now paying people abroad to do. America is not going to be built and grow on low end jobs. You want those jobs to go to other countries so our economy can develop. We should be concerned about the high end jobs we are losing to other countries. We don't want to bring back 80 cent hour jobs here. That's not going to make America the fastest growing economy in the world again. You don't want to lower the minimum wage and encourage that side of the economy to grow. That's the bad side of the economy. Think about bringing high end workers, changing immigration visa for skilled labor. That's where you want to grow the economy. Those jobs are gone and we don't want them back.

Cheryl Casone: Deadbeats to the rescue? Well, a new report is finding that folks falling behind on their mortgage payment are now taking the money and spending it on luxuries, like a new car, fancy dinners, and lavish vacations. Before you get mad, Jonas says it's great for everybody. Why so?

Jonas Max Ferris: A few reasons. First of all if someone is underwater in their house and they start making these massive payments that they stupidly got in over their head by thinking the home value would always go up, and not buying all these luxury goods that would be worse for the economy particularly car sales, etc. Don't forget the people that own these mortgages, in some cases are foreigners. So you're hosing them and helping our economy by spending money. The other reason is it's not good to keep throwing money at hugely underwater investment. Imagine if you bought a ridiculous condo in Nevada for $300,000 and it's worth $150,000. That's not a good investment to spend the rest of your life paying for that even though morally you should do it. It's bad for the economy. It's not great for the bankers, but if you talk about the retailers, car sales, it's better.

Tracy Byrnes: Cheryl, this drives me crazy. You sign on the dotted line. Pay your bills. That's it end of story. You made a bad investment decision, too bad we all do that once in a while. This is going to hurt the economy way, way farther down the line. You know, part of the problem Cheryl is all these Obama loan modification programs are not working. Someone tries to go get a loan modification and they can't get it, they throw their hands up and they say *too bad I'm putting gas in the boat instead*. The average person when they start the foreclosure process is in their home for 481 days before they are evicted. That's 481 days of *whoo-hoo, let's have a party and buy a Ferrari*. Nuts!

Wayne Rogers: I would agree. I think that's fine. You're confusing a moral issue with an economic issue. The economic issue is your right. They're not paying the banks, or taking the money and spending it in the economy. They're spending it somewhere else. That's helpful to the economy. Morally it's not right that their defaulting on the contract. No, of course it's not right that their defaulting on the contract. They entered the contract on both sides and they knew what was going on. They should make their payments. They're putting it in the economy. God love them.

Jonathan Hoenig: They're putting into the economy, but they're taking out of it. How can you build an economy on a basis in which contracts aren't enforced? You know, Cheryl, we demonize foreclosures, you know what, Tracy's right. People aren't getting foreclosed on if they are actually paying their bills. I know that's such a foreign idea to be responsible. Jonas, it doesn't matter if it's foreign owners of mortgages or domestic owners of mortgages. People have a responsibility to pay their bills.

Christian Dorsey: We haven't talked about some other reasons why this is a bad idea. One, when folks don't pay their mortgages and homes go into foreclosure this leads to continued blight in neighborhoods and communities. This affects your neighbor's household wealth and the municipal tax collections that your community has, which means they either have to raise taxes or cut services. It means that you, yourself even though you may be having a party today at some point down the road that bank is going to be able to come after you for the assets that you have or the assets you'll have in the future. This is a short-term gain with some serious long-term problem.

What I Need To Know For Next Week

Tracy Byrnes: Fox Business Network: Look out this summer. Airline unions are planning to strike just in time for your vacation. Make sure you follow this and call your airline before you leave.

Jonathan Hoenig: Capitalistpig.com: With so few stocks now notching new meaningful highs… only 26 percent are now above their 50-day-moving averages, investors with an appetite for risk might consider an alternative to straight equity exposure via iShares Diversified Alternatives Trust (ALT), a hedge-fund like ETF that employs yield arbitrage, relative value and technical momentum across three separate asset classes. With a goal of absolute return and low correlation to stocks, the portfolio now holds exposures ranging from a short position in Japanese bonds to a long position in Dutch stocks and it's beating the Dow YTD with lower risk.

Jonas Max Ferris: Maxfunds.com: Some guy in Texas won a $1.5 million settlement from a debt collection company because the harassing debt collector calls over his small bills were racist. This is good for sellers of phone recording devices and related electronics. Buy RadioShack Corporation (RSH)